It’s Getting Harder to Buy First Home, Survey Finds

WASHINGTON — The typical American family’s ability to buy a home shrank between April and June for the second straight quarter, with first-time home buyers falling even farther behind, a real estate trade group said Wednesday.

Dorcas T. Helfant, president of the National Assn. of Realtors, attributed the widening gap to the inability of first-time buyers to raise the necessary down payment for a previously owned home--not mortgage rates, which averaged 8.46%, the lowest in nearly 20 years.

The association’s overall housing affordability index for the second quarter was 121.2, down from 122.4 between January and March and 122.7 during the final quarter of 1991.

The index shows the ability of a family earning the median income to purchase a median-priced resale home. When it measures 100, the median family income equals the amount needed to purchase a median-priced home using conventional financing and a 20% down payment.

The median income was $36,926 during the second quarter, meaning half the families in America earned more than that amount and half earned less. During the time period, half of the existing homes cost more than $103,600 and half less.

Since the index measured 121.2, the typical family had 121.2% of the income necessary to finance a median-priced home.

The index for first-time home buyers, on the other hand, was 78.7 during the April-June period, down from 79.7 in the first quarter and 79.8 in the final three months of 1991.

That meant that half of the renters who are prime potential first-time buyers fell 21.3% short of the $29,833 income needed to qualify for conventional financing covering 90% of a $88,100 starter home.